IC Homeowners....

I am looking for advice in regards to purchasing my first home. Should I go the traditional route and save 20% for the down payment or look into one of those programs like hud, usda, etc. that don't require as much of a down payment? What did you do and are you happy with your decision. I have read books but I also want to hear peoples experiences. My fico score averages 725 from all three bureaus with no derogatories on my credit report. I have been at my job for over 2 years. I have a car payment for two years that i've never been late on. Financial gurus like Suze Orman say that if you don't have at least 20% down payment you are not ready or able to afford a home. I also listen to dave ramsey, michelle singletary, glinda bridgforth, and read other books on personal finances.

Replies

  • Black_SamsonBlack_Samson I drive a fast car... Posts: 48,180 Regulator
    i did the down payment cause they threw in the free dryer, washer and dishwasher...
    shoulda told them i wanted grass...
    CONFLICT usmarin3DWODarthRozay
  • GettinLoGettinLo Posts: 8,013 ✭✭✭✭✭
    Go the FHA route... you wont need the 20%... just but a home that is BELOW your means... stay in it for a few years, build equity and then buy your dream home.
    twinzmomSion
  • DaBullDaBull Posts: 7,312 ✭✭✭✭✭
    aone415 wrote: »
    Go the FHA route... you wont need the 20%... just but a home that is BELOW your means... stay in it for a few years, build equity and then buy your dream home.


    i would co-sign this but the rates are soooo low I would go for the 20% if you can afford it because your mortagae will not be crazy high. I bought my 2nd home in September and my rate is 3.25%. I purchased a 2450sqfoot 4bdrm house for $185,000 and because of the difference in rate , i am still paying less than my first home which i got back in 2008 which only cost $150,000 because my interest rate was 6.3% right before the market sank. I only put down 3% part of some wells fargo program
    twinzmomGettinLo
  • MzKBMzKB Posts: 3,135 ✭✭✭✭✭
    edited January 2013
    If you can pay cash for your house do so
    If not check into all loans HUD, FHA, Traditional, Banks. There are alot of incentives for first time homeowners
    No matter what type of loan you choose put as much down as you can. It will lower your mortgage payments
    If your mortgage is low enough make an extra payment towards your principal and that will cut years off your mortgage
    Buy what you know you can afford
    Look for foreclosures and short sales

    What city/state are you looking to buy in?
    s_a_m_r_i_o
  • caddo mancaddo man You cant @ me bro Posts: 15,814 ✭✭✭✭✭
    edited January 2013
    yeah do the 20% down payment. It will be worth it. In the end, you want to have maney on hand if it is not a new home. The worst thing that can happen will. Insurance is good to have but your deductible will be more than the repair would cost.

    Never buy a home that will leave you broke and living check for check. You should have plenty money left over. I think they say 20% or 25% of your income is the most your home should be allocated.
  • caddo mancaddo man You cant @ me bro Posts: 15,814 ✭✭✭✭✭
    Never go with a bank that doesnt let you pay off the loan early. Yes there are banks and loans like that. The way the market is dont settle. Pick a home that you see yourself in 30 years from now. Also pick an area that will be nice enough for you in 30 years. Always try to go somewhere that has a nice school. The resell value at places with good schools are always high.
  • texas409texas409 Posts: 14,484 ✭✭✭✭✭
    Great thread
  • MARIO_DROMARIO_DRO Posts: 12,266 ✭✭✭✭✭
    ARE YOU PLANNING ON STAYING IN THAT HOUSE 4EVER?... IF NOT, WHY PUT DOWN 20%?...OVER 30YEARS, 20% AINT GONE KNOCK MUCH OFF OF YOUR MONTHLY MORTGAGE...

    IF YOU CAN AFFORD IT, I SAY DO A 15 YEAR LOAN.. I WISH I HAD HAVE DONE THAT...

    MY WAY OF THINKING WAS:

    SAY FOR 30 YEARS, MY MORTGAGE WOULD BE 1200$
    SO IF I HAVE TO PAY THAT 1200 IN 30 YEARS, I WOULD HAVE TO PAY 2400 IN 15 YEARS CAUSE THEY EQUAL THE SAME.. BUT I WAS WRONG..WITH THE 15 YEAR LOAN MY MORTGAGE WOULD HAVE ONLY BEEN LIKE 2-300 MORE A MONTH.. ALL THAT EXTRA MONEY IS JUST INTREST.



    BUT I DID A VA LOAN SO I AINT HAVE TO PUT NOTHING DOWN
  • MzKBMzKB Posts: 3,135 ✭✭✭✭✭
    edited January 2013
    There are several reasons to put money down
    -The number one reason is INSTANT EQUITY (You are automatically underwater when you put no money down unless you purchased less than the value)
    -improves your chances with lender
    -lower interest rate
    -lowers payments
    -no private mortgage insurance/lenders mortgage insurance
  • 2stepz_ahead2stepz_ahead Who I am is Complex, What i am, simply put. I'm a Threat walking out the lions denPosts: 16,499 ✭✭✭✭✭
    had credit ok for a 5% downpayment at the time and went the pmi route...

    but now my last purchases was with cash.

    so its worth it to save the money cuz, just get a second gig an suck it up.....trust me. it will help alot up front
    Sion
  • BarryHallsBarryHalls Posts: 3,914 ✭✭✭✭✭
    Get a First Time Home Buyer Loan that requires little to NO down payment. Do your research on that if this is your first home purchase.
  • Black_SamsonBlack_Samson I drive a fast car... Posts: 48,180 Regulator
    i did the down payment cause they threw in the free dryer, washer and dishwasher...
    shoulda told them i wanted grass...

    . I've seen ppl cop 300-400k houses with dead grass and a funky ass tree in the front yard. That shit is fucked up

    woulda been my luck...
  • major painmajor pain Posts: 10,057 ✭✭✭✭✭
    Putting 20% down really only qualifies you for different programs with most lenders. The equity thing can change very quickly depending on a lot of factors. There are still mortgage lenders out there that offer no PMI loans as well. If you have good credit I would look into those. Especially if you have that kind of cash available on hand.

    If you have good credit.. 720+ mid score, I would buy down my interest rate to 3.0% or lower (depending on how many percentage points it costs you and if you are looking at 30 year loans.. 15 will be even lower already), shop for a no-PMI mortgage, and put 5-10% down. This way you keep some cash on hand for rainy days and get a great interest rate.

    At just about ANY cost, I would avoid monthly PMI altogether. There are some new FHA programs that allow you to pay it up front these days. Good luck.
  • major painmajor pain Posts: 10,057 ✭✭✭✭✭
    And also make sure you get the seller and/or mortgage company to cover some of your closing costs. 6% used to be the target but that may be hard these days. It is a fairly common request, but some programs have a maximum contribution.

    This will help with the total amount you need to bring to closing... which is not just your down payment.
  • MARIO_DROMARIO_DRO Posts: 12,266 ✭✭✭✭✭
    LIKE I THOUGHT YALL NIGGAZ WAS LYIN ABOUT BUYIN HOUSES WITH NO GRASS... WTF..


    THATS LIKE PIZZA HUT DELIVERIN YO PIZZA IN THIER BARE HANDS WITH NO BOX.. " SIR YOU DIDNT ASK FOR A BOX"
  • ImTheKangRoundHereImTheKangRoundHere Posts: 4,649 ✭✭✭✭✭
    welcome to my home
    hr2177731-1.jpg
  • s_a_m_r_i_os_a_m_r_i_o Posts: 2,089 ✭✭✭✭✭
    I'll recommend paying off your car first to completely be in no debt when you purchase your home. You can get a FHA (at least 2 years work experience)loan to have a big down payment but pay less monthly or conventional loan (20% down payment) with bigger payments.

    Depending on how bad you want a house, buy it in full with cash is another option (with no other debt). It's possible to come up on a home from $20,000-$50,000 that's not in terrible shape to be fixed up how you want it over the years to build equity.
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